The Police and Prisons Civil Rights Union (Popcru) has become the latest union to reject the tax implications of the Revenues Laws Amendment Bill of 2022 which was signed into law to become Revenues Laws Amendment Act No 12 of 2024.
On Sunday, the police union said it wanted the 10% seed capital, which will establish the savings pot of the two-pot system, to be tax-free and must not capped at R30 000.
The countdown to the implementation of the two-pot retirement claims in less than a week, has resulted in a flurry of calls from concerned institutions warning employees to tread with caution when trying to access their pensions.
The South African Revenue Services (Sars) at the weekend said employees with outstanding tax returns or not registered for tax will not be able to claim, adding that members can still register through its website in order to qualify for the withdrawal of their pensions.
Popcru president Thulani Ngwenya in a statement said workers in both the public and private sectors have been calling for access to a portion of their pensions before retirement due to financial distress with others resigning from their jobs for a while just to get access to their pensions before finding another job months later.
“Workers in both the public and private sectors have for some time been calling for access to a portion of their pensions before retirement, mainly based on their indebtedness due to financial need and distress, and consequently, early retirement as a mechanism to cash on their pension lump sum for relief.
“This was the case in the public service, where workers across sectors would resign only to start looking for employment within a year after having cashed in on their pensions. So, among others, access to a portion of pensions was to relieve themselves of financial distress without having to resign,” Ngwenya said.
Ngwenya said Popcru is discouraging its members from accessing the savings pot withdrawal as they will be worse off as the two-pot process is not designed to assist public servants but will disadvantage them.
As such, Ngwenya said Popcru demands a revised system that allows workers to a access a portion of their pensions without locking away the other portion until retirement.
“We demand a revised two-pot system that allows workers to access a portion of their pensions before retirement but does not lock away the other portion until retirement, and for this, we will be engaging our sister unions through the upcoming Cosatu Central executive committee meeting on the 26th of August,” said Ngwenya.
During this meeting, Popcru says it will call for the delay on the implementation of the two-pot system, pending further proposals all stakeholders, allow all members to access the actual 10% of their pension fund while also allowing its members to access their pension fund savings tax free.
“The 10% seed capital must not be capped at R30 000 (it must be the actual 10% of the member’s pension fund. Allow members to receive all of their pension fund contributions upon resignation.
“Our initial submission was based on the outcry by our members that they need to access their pension fund to assist with paying off housing bonds, and to access their pension fund to assist with building houses and to settle other forms of debts which in our view would have brought some relief to our members, and it is our view that these proposals were not incorporated in the final product of the two- port system,” he said.
The Star